The Financial Sector Conduct Authority ("FSCA") has been steadily refining its regulatory agenda in anticipation of one of the most significant impending legal reforms in the South African financial sector, embodied in the Conduct of Financial Institutions Bill ("COFI Bill)" or ("Bill"). While the FSCA's 2025 Three-Year Regulation Plan (covering 1 April 2025 to 31 March 2028) ("Plan") does not definitively specify precisely when the COFI Bill will take effect as law, it does provide valuable indications of government and the FSCA's readiness to bring the Bill into force. The Plan provides guidance on the Bill's projected timeline and the steps required before it becomes operational.
From the outset, it is clear that the COFI Bill remains a top priority for the FSCA as part of its commitment to establishing a more holistic, robust, and customer-focused conduct framework within South Africa's financial services landscape. At present, the National Treasury is engaging with a wide array of stakeholders, with the FSCA as a principal partner, to finalise the Bill's provisions. Once this drafting work is complete, the Bill must still proceed through Parliament, undergo any required consultation and amendments, and ultimately await Presidential assent before it becomes binding law. This could occur on a staggered schedule, depending on how quickly the Bill progresses through the legislative institutions.
The Plan explains that many of the FSCA's own initiatives have been intentionally deferred or suspended, so as not to create misalignment between current rules and the framework that will ultimately be implemented under the COFI Bill. In essence, the FSCA has indicated that it does not wish to introduce sweeping new regulations on particular financial institutions if doing so would be quickly overtaken by the more comprehensive reforms envisioned by the Bill. For instance, the FSCA has consolidated certain draft requirements for insurance firms, retirement funds, and collective investment scheme managers under the transitional arrangements that will be carried across once the Bill is promulgated.
Given the multi-step parliamentary and consultative processes, it remains difficult to ascribe a firm date to the Bill's commencement. Several indicators nevertheless provide guidance:
- The FSCA has confirmed that the Bill will likely be placed before Parliament once the current drafting phase is complete and the National Treasury has consolidated all input.
- Should there be significant delays, the FSCA intends to start implementing frameworks compatible with the future COFI structure in a phased or staggered manner, minimising regulatory uncertainty for financial institutions.
- The transitional arrangements for the Bill's implementation - particularly where the FSCA and the future Prudential Authority mandates overlap - will be crucial to understanding how quickly certain aspects of the Bill can be enforced.
In practical terms, once the Bill completes its passage, it will come into force on a date determined by any transitional provisions in the legislation itself or via subsequent notice in the Government Gazette. The Plan signals that a large volume of its near-term regulatory projects is either officially on hold or designed to dovetail with the Bill's new regime and thus become operative shortly after the Bill becomes law. Consequently, if the parliamentary process proceeds smoothly and without excessive delays, it is plausible that core facets of the Bill could effectively be implemented within the next two to three years.
Until that time, businesses and stakeholders can prepare for the evolving regulatory approach by monitoring key themes in the Plan, including governance reforms, harmonised conduct standards, and a move away from overly prescriptive rules towards a more principle-based system. The FSCA has also emphasised that the Bill's ultimate publication and commencement should herald a period of reduced legislative churn. Instead, the markets will experience a more stable long-term framework, reflecting the COFI Bill's scope and modern alignment with international best practice.
Thus, while an exact date for the commencement of the COFI Bill remains dependent on ongoing parliamentary processes and coordination between the FSCA and National Treasury, the path towards its implementation is steadily becoming clearer. Stakeholders are strongly encouraged to engage with the FSCA's progress updates, and to participate in any consultation opportunities so that they are ready to meet the Bill's requirements as soon as they come into force.
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